Asian markets rose broadly in line with Wall Street on Wednesday, as better-than-expected U.S. inflation data did little to dampen expectations that the Federal Reserve would start cutting interest rates later this year.
February’s consumer price index was higher than expected in January, which was not ideal, but analysts said it did show that price increases were leveling off, and briefly eased at the start of the year. He said there were often sharp increases.
All eyes are now on next week’s central bank policy meeting, where policymakers are expected to announce their interest rate outlook for the rest of the year.
Traders are pricing in three rate cuts by the end of 2024, according to Bloomberg News, and the Fed is also forecasting the same, with the first rate cut likely in June.
All three major indexes in the New York market rose to near record highs, and the gains in Asian markets were much wider.
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Hong Kong’s index rose for the fourth consecutive day, while Sydney, Seoul, Singapore, Taipei, Manila and Jakarta were also in positive territory.
Talk that the Bank of Japan may begin a shift away from ultra-easy monetary policy next week weighed on Tokyo markets, while Shanghai and Wellington markets also fell.
“Traders in Asian markets may be confused by the combination of better-than-expected inflation numbers and record highs in U.S. stocks, but Asian stocks remain the best on Wall Street,” said Hebe Chen, an analyst at IG Markets. “This is likely to reflect an optimistic outlook.”
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But he cautioned that the latest numbers “will no doubt prompt the Fed to choose particularly cautious wording” next week.
Stephen Innes of SPI Asset Management said traders believe the Fed is satisfied that inflation is above its 2% target for now and is prepared to cut interest rates several times before the end of the year. added.
“Investors are feeling emboldened to pursue riskier opportunities without fear of rising interest rates,” he said in a commentary.
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“This sentiment is further supported by the Fed’s apparent lack of concern about the risk that the wealth effect could reignite demand-side inflation.”
Bitcoin previously hovered just around $73,000, buoyed by optimism about interest rate cuts and news this week that Britain’s Financial Conduct Authority will join US regulators in allowing the creation of crypto-related securities had set a new record, but it was hovering around $72,000.
Tokyo – Nikkei Stock Average: down 0.4% to 38,636.12 (break)
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Hong Kong Hang Seng Index: up 0.4% to 17,168.31
Shanghai – Overall: down 0.5% to 3,040.56
Dollar/JPY: down to 147.44 yen from 147.67 yen on Tuesday
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EUR/USD: down from $1.0930 to $1.0925
GBP/USD: down from $1.2795 to $1.2793
EUR/GBP: down from 85.41p to 85.39p
West Texas Intermediate: up 0.6% to $78.03 per barrel
Brent crude: up 0.6% to $82.39 per barrel
New York – Dow: up 0.6% to 39,005.49 (close)
London – FTSE 100: up 1.0% to 7,747.81 (close price)
Dan/Kururu
